Haver Analytics
Haver Analytics
| Jun 13 2024

U.S. Producer Price Index Pulled Lower in May by Energy Prices; Core Unchanged

  • Goods prices less food and energy rise moderately.
  • Services prices hold steady.
  • Food prices decline for second straight month.

The Producer Price Index for final demand declined 0.2% (+2.2% y/y) during May after rising an unrevised 0.5% in April, according to the Bureau of Labor Statistics. A 0.1% gain had been expected in the Action Economics Forecast Survey. The PPI excluding food & energy held steady (+2.3% y/y) after rising 0.5% in April. A 0.3% rise had been expected. Producer prices excluding food, energy & trade services remained unchanged (3.2% y/y) in May following increases of 0.5% and 0.2% in the prior two months.

Final demand energy prices declined 4.8% last month (+1.8% y/y) after a 2.0% increase. Gasoline prices fell 7.1% (+0.9% y/y) after rising 5.0% in April. Electric power prices eased 0.1% (4.2% y/y) following a 0.5% increase. Natural gas prices increased 0.4% (-1.3% y/y) after falling 3.2% in April. Food prices eased 0.1% (+1.3% y/y) after declining 0.6% in April. The decline reflected a 2.1% weakening (-7.3% y/y) in fruit & melon prices as well as a 1.6% drop (unchanged y/y) in the cost of beef & veal. Fresh egg prices dropped 34.8% (+70.5% y/y). Offsetting these declines, fresh & dried vegetable prices rose 2.8% (-7.0% y/y) and grain prices which rose 7.9% (-26.6% y/y).

Prices for final demand goods less food & energy rose 0.3% (1.7% y/y) in May after gaining 0.1% in April. Finished consumer goods prices increased 0.4% (2.0% y/y) after a 0.1% uptick. Core nondurable goods prices strengthened 0.6% (2.6% y/y) after improving 0.1% in April. Durable consumer goods prices also edged 0.1% higher (1.2% y/y) for a second straight month. Capital equipment prices rose 0.2% (2.8% y/y) after a 0.1% uptick, while government-purchased goods prices held steady (2.1% y/y) following a 0.3% rise.

Prices for final demand services held steady last month (2.6% y/y) after rising 0.6% in April. Trade services prices improved 0.2% (-0.6% y/y) after a 0.6% gain. Prices for final demand transportation and warehousing services fell 1.4% (-0.3% y/y) after a 0.5% decline. Services prices less these costs improved 0.1% (4.5% y/y) following a 0.7% increase.

Construction costs declined 1.5% (-0. y/y) after rising 0.2% in April.

Prices for intermediate demand processed goods declined 1.5% (-0.7% y/y) in May after rising 0.5% in April. Processed energy goods prices fell 8.0%, while food prices rose 0.3%. The index for intermediate demand unprocessed goods fell 1.8% (-4.7% y/y).

The PPI data are published by the Bureau of Labor Statistics and can be found in Haver’s USECON database. Further detail is contained in PPI and PPIR. The expectations figures are available in the AS1REPNA database.

  • Prior to joining Haver Analytics in 2000, Mr. Moeller worked as the Economist at Chancellor Capital Management from 1985 to 1999. There, he developed comprehensive economic forecasts and interpreted economic data for equity and fixed income portfolio managers. Also at Chancellor, Mr. Moeller worked as an equity analyst and was responsible for researching and rating companies in the economically sensitive automobile and housing industries for investment in Chancellor’s equity portfolio.   Prior to joining Chancellor, Mr. Moeller was an Economist at Citibank from 1979 to 1984.   He also analyzed pricing behavior in the metals industry for the Council on Wage and Price Stability in Washington, D.C.   In 1999, Mr. Moeller received the award for most accurate forecast from the Forecasters' Club of New York. From 1990 to 1992 he was President of the New York Association for Business Economists.   Mr. Moeller earned an M.B.A. in Finance from Fordham University, where he graduated in 1987. He holds a Bachelor of Arts in Economics from George Washington University.

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